What is deffered tax liability?

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prasanna

prasanna (Querist)
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14 June 2014 Please explain me about deffered tax liability in simple words.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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14 June 2014 Deferred Tax Liability arises due to timing difference in the value of Assets as per Books of Accounts and as per Income Tax Act.

Also we can say that Deferred Tax Liability/Asset arises due to the difference between Profit as per Books of Accounts (P&L Account) and profit as per Income Tax Act. (Taxable Income).

Depreciation is the main reason for difference in the profits as per books of Accounts and Taxable profits as per Income Tax Act. Both Income Tax Act and Companies Act prescribe different rates of Depreciation for different categories of Assets. Additional depreciation is also a big reason for DTL.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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14 June 2014 Check out in detail from below link--

https://www.caclubindia.com/experts/income-tax-query-504520.asp#.UpsYAMQW0jV

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